Victorians will soon see the results of the Victorian Government’s pernicious decision to triple the royalties paid by the state’s brown coal industry from 1 January.
Energy suppliers will be forced to increase costs to consumers in Victoria as a result of the April 2016
decision. The expected increase in electricity costs will hit Victorian businesses hard, especially the manufacturing sector where uncertain economic conditions are already placing the industry under strain.
The Victorian Government claims that energy suppliers can ‘absorb’ these increases – ignoring the practicalities of the National Electricity Market (NEM).
Through brown coal royalty slugs and bans on conventional and unconventional gas exploration, the government seems intent on making life as difficult as possible for safe, reliable and proven sources of electricity – brown coal and gas.
This is happening just at the time Victoria’s generating capacity will be diminished with the closure of the Hazelwood power station and there are rising concerns about the stability and security of Australia’s east coast power generation network.
The Victorian Government seems intent on increasing the state’s dependence on expensive and part-time energy sources and committing Victorian households and industry to higher energy prices.
It is apparently not enough to have an Australian Government Renewable Energy Target (RET) of at least 33,000 Gigawatt-hour (GWh) of Australia's electricity coming from renewable sources by 2020.
Victoria’s latest policy idea is to ‘incentivise’ new Victorian renewable energy capacity development through an auction scheme. It will pass the cost of the scheme onto electricity users via their energy bills. In so doing it will subsidise uneconomic renewable energy projects while driving out affordable, reliable coal-fired energy.
Instead of exercising leadership and working with communities regarding secure energy options, the Victorian Government is turning its back on energy-intensive industries.
A decade ago Australia had the lowest cost energy in the OECD. Now it has the 27th lowest. The consequences for energy intensive sectors have been as inevitable as they were predictable.